CORONAVIRUS
280 | Premium Letdown: Hotels challenge property insurers’ refusal to cover COVID-19 revenue loss
CORONAVIRUS
As the hospitality industry struggles to mitigate the massive loss of revenue caused by the coronavirus pandemic, hundreds of hotel owners are filing lawsuits to force their property insurance providers to cover their financial casualties.
Meantime, state and federal lawmakers are considering legislation that would mandate U.S. insurance companies pay for business losses related to COVID-19.
Such a payout could surpass $600 billion, reported Best’s Insurance in May.
American Property Casualty Insurance Association, a trade group, puts the payouts even higher. In June, the association reportedly estimated payouts to would cost insurers $255 billion to $431 billion a month.
The amounts are not sustainable and would ultimately make many insurers insolvent, say insurance industry experts.
Hotel owners say they deserve payouts because they’ve paid premiums for years to cover high-loss scenarios such as the one they’re facing now.
In almost every case, insurers are refusing to pay, saying policies exclude losses caused by a viral plague or COVID-19 has not caused any physical damage to hotel properties that result in a stoppage of business.
It’s fixing to be an epic battle.
In this episode of Lodging Leaders, we examine the issue of business interruption insurance for hotels negatively impacted by the coronavirus pandemic.
We feature Sanjay Patel, CEO of MHG Hotels in Indianapolis who has filed a lawsuit against his insurance provider; Robert Zarco, a partner at the law firm Zarco Einhorn Salkowski & Brito in Miami who specializes in litigating business interruption insurance claims on behalf of business owners; Gregory Riehle, a lawyer and hospitality consultant and former CEO of the Resort Hotel Association, a hotel insurance group; and Robert Hartwig, Ph.D., a clinical associate professor and director of finance at the Center for Risk and Uncertainty Management at the University of South Carolina’s Darla Moore School of Business who’s co-authored a white paper about the un-insurability of businesses affected by viral pandemics.
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CORONAVIRUS
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287 | The Long Haul: Extended-stay hotels show their strength in a crisis
Extended-stay hotels are weathering the coronavirus crisis better than their transient cousins, according to reports. The Highland Group’s half-year report shows economy and mid-priced extended-stay hotels are faring better than upscale extended-stay accommodations. Second-quarter earnings reports from companies such as Extended Stay America prove the resiliency of the sector, especially when sales teams shift their focus to new prospects such as college students, leisure travelers who value the kitchen and essential workers in it for the long haul. Long Live Lodging examines what gives extended-stay its muscle in a weak economy. This report is part of our ongoing coverage of the coronavirus crisis and its impact on the hotel industry.
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285 | ‘Allure of the Door’: Exterior-corridor hotels trending in COVID-19 pandemic
Almost overnight, the roadside motel is a hot commodity. Travelers are going by car and when they stop they want the safest stay possible. The coronavirus pandemic has pushed health and safety to the top of hotel guests’ most-favored-amenity list and exterior-corridor properties appear to provide more of a risk-free stay than their interior-corridor cousins. Long Live Lodging examines the new shine travelers have put on exterior-corridor motels during the COVID-19 crisis and how brands heavy with motel-style properties are responding to the trend. This report is part of Long Live Lodging’s ongoing coverage of the coronavirus crisis and its impact on the hotel industry.